What is usually a reason for initiating a lease purchase agreement?

A lease purchase agreement often arises from a desire to take advantage of tax or financing arrangements. This type of agreement combines elements of leasing and purchasing, allowing the tenant to eventually acquire the property. By structuring the arrangement in this way, both the lessor and lessee can potentially benefit from favorable tax implications—such as tax deductions related to mortgage interest or depreciation—that might not be available in a standard rental situation. Additionally, it may allow for more flexible financing options, which can make it easier for the tenant to secure financing for the eventual purchase.

This option highlights the strategic financial planning that can occur through a lease purchase agreement, making it appealing for those who may not currently qualify for a mortgage or those looking to lock in a purchase price before committing fully to a purchase.